Journalist Mistakes Inflation for Interest

The Milwaukee Journal Sentinel carries a regrettable story about a little old lady who lost her “life savings” of about $20,000 because she left it in the form of a check in a safe deposit box for 22 years (regrettable both because her life savings was only $20,000 and because she lost it). Tucked inside, we have a stunning display of simplistic Web research and basic misunderstanding of economics:

Willie Floyd said she hadn’t thought about the interest she was losing by not having it in a standard savings account. The interest she would have earned could vary, but a calculator provided online by the Federal Reserve Bank indicates that if she had bought something for $19,700.22 in 1985, it would cost her $38,480.79 to buy the same goods or services, based on the Consumer Price Index.

Bravo, Marie Rohde, your economics teacher must be proud!

You don’t have an economics teacher? The deuce you say!